Unbundling The Newspaper Could Be A Good Thing

from the future-of-news dept

A lot of the discussion at the Future of News conference has focused on the supposedly dire consequences of the newspaper's decline. Newspaper readership is falling, and advertising revenues are dropping even faster. A lot of people here (especially folks who work at newspapers) seem to think that newspapers fill a unique niche that will go unfilled if increased competition from the Internet causes newspapers to go out of business. One of the people on the second panel, Eric Alterman, wrote an article for the New Yorker recently making the same argument. He thinks that bloggers have a "parasitic relationship" with the mainstream media, perhaps exemplified by me linking to a New Yorker article as the jumping off point for this post!

What I think this misses is that the current structure of the newspaper industry may not make a lot of sense in the Internet age. Today, every newspaper has its own stable of movie critics, book reviewers, sports reporters, and coverage of science, technology, medicine, foreign affairs, and other topics. This arrangement was largely dictated by the limitations of 20th-century distribution technologies; in the 20th century, there were economies of scale to delivering news, and so it made sense to put all of the day's news into one big bundle and deliver it to everyone's door.

Thanks to the Internet, the web, and technologies like RSS, there's no longer any reason for everyone to get the same bundle of news, and there's certainly no reason to think that everyone will want to get all their news from the same metropolitan area. There's no particular reason that I should get my movie reviews or technology coverage from my local paper, the St. Louis Post-Dispatch, rather than specialized publications based elsewhere that cover these topics in great depth. People can assemble their own bundle of news by picking and choosing among the thousands of publications online. And for those who don't have the time or the knowledge to do that, there are going to be plenty of aggregators that offer a comprehensive summary of the day's news syndicated from a bunch of different sources.

Treating the metropolitan newspaper as a bellwether for news gathering as a whole is misguided. Newspapers are declining not because there's no market for good content, but because the 20th-century newspaper probably isn't the best model for organizing the enterprise of news gathering. There's a ton of good content on the Internet that doesn't come from mainstream media outlets, and there's every reason to expect that a lot more will be created as the online audience continues to grow. But the new outlets aren't newspapers, and there's no reason to expect them to have the comprehensive ambitions or monolithic structure of newspapers. People looking for a single institution that will take the place of the newspaper are likely to be disappointed. Rather, the newspaper is likely to be replaced by a swarm of smaller, nimbler and more specialized news outlets, combined with aggregation tools that help people assemble their own bundles of news from these myriad sources.

Parasitic?

There's no question that some bloggers' relationship to the "mainstream media" is occasionally parasitic, but I think the descriptor is generally not accurate. The entire media ecosystem needs a wide variety of contributors. Your post here adds value to the NY Times article, and, potentially, creates discussion, and draws new readers to the issue. These days, reading blogs is a more likely gateway to the consumption of news than reading a newspaper, especially for the younger demographic.

New Yorker

Newspapers and the Entertainment Industry Needs to Wake up and Smell the coffee.

These must be the most stubborn group of businesses around today. Instead of changing their business model to fit what people are doing they would rather hold on tightly and hope it's just a fad. People are starting to realize that they can get beat by a 16 y/o kid with a book on PHP, MySQL, Javascript, some Ajax Libraries and lots and lots of spare time. This combination of skills can defeat mega companies even that already have a web presence.

I suppose they are going to wait until the last minute to make some big changes in their company culture. I frankly could care less. The Internet allows almost anyone to be almost anything. Everyone should realize this. The Internet levels so many factors that used to hinder social and economic growth.

News companies should have been the first adopters. They where already in most households. People where comfortable with the one or two sports writers and may have stayed that way.

Now we are spoiled. If we don't like what you are saying we just bookmark another website. Easy. Done! So much easier then trying to find a better newspaper

Newspapers are a dying breed.

In my town, we have a yearly Armed Forces parade. Our newspaper usually publishes the schedule that the parade will take and the activites around it. I tried to use thier website today to see the article and found that the site had been revamped, badly, and I would have to fork over my credit card info and pay a dollar to read the article. So I went to my city's website and got the schedule there instead.

I sometimes buy a newspaper if I see a headline that affects me, but most of the time I get my news on the Internet. There's no way I'm going to fight traffic with gas this high to go to a convenient store to buy a paper, nor am I going to register my private info and cc info with a site that doesn't even have a privacy policy. Newspapers are very quickly making themselves worthless.

Even if they were easily accesible and/or had a free website, they simply don't have the types of news that I'm interested in. However, I do buy several magazines each week at my local bookstore, and I get several publications to my home each month. Even though rates have been raised on almost all of them, their content is still worth the cost.

Newspapers ignore their niche

Newspapers are ignoring the niche that can earn them the most money: in-depth, comprehensive coverage of local news. They already have the staff, sources and relationships. If local newspapers used their web sites to publish the best local news and allowed it to be aggregated over RSS, they could sell a lot more ads. The local TV news outlets don't have time for in-depth, comprehensive reporting. Why don't the newspapers fill the niche?

You need to account for success of aggregators

According to Outsell, Inc., even as newspapers are headed for single-digit percentage declines in revenue during calendar 2009, news aggregators such as Factiva and LexisNexis can expect double-digit increases in revenue. (See here.) The irony is, of course, that the aggregators would be nowhere without the news organizations (and Google would not do so well, either).

This has led an increasing number of news organizations (FT.com at the forefront of them) to restrict content offered to aggregators, so as to extract more revenue from their own material.

I think there are a number of good scenarios where newspapers could do well in the future, once they have woken up to the decline and ruin of their old business models. For example, news companies could form their own aggregator, which would quarantine all information less than a week old, ensuring they received the "lion's share" of revenue from that source. It seems likely News Corp will make such a move on its own during 2009. (That is purely an opinion, based on that company's behavioral patterns; I have no inside information, nor have I seen any direct indications of this.)

In the short term (the next three years or so) I believe we do need to be concerned about the health of the news industry. I've made a very small contribution to trying to reverse the movement of revenue to aggregators by developing a software application which allows users to easily subscribe to multiple news RSS feeds, then build their own feed(s) by dragging and dropping news items. The resulting information sets can be redistributed as new RSS feeds, or html email newsletters. Effectively, I'm providing functionality that is equivalent to what the aggregators offer, but using free RSS information. (The background of its development, which is based in part on a study of Douglas Engelbart's work on Augmentation is on my blog.)

I'm hoping that businesses currently paying $1000s a year in fees to aggregators to access information available for free over the internet (yep, they do that -- I used to work for LNG, so I know) will consider this as an option. Using the RSS will, as the previous commenter (Jeff) points out, drive traffic to news sites, which they should be able to convert into advertising-based revenue.

Newspapers

A lot of these discussions about the "death of newspapers" leave out the fact that most owners (and Wall Street analysts) expect newspapers to keep earning 25 to 30 percent monopoly profit margins.

Pretty tough to keep up those kinds of margins when consumers just have a lot more choice.

The "parasite" thing is just ridiculous... I've heard it before. It's true that most bloggers don't pick up the phone and do the kind of difficult and time-consuming fact-verifying that newspaper reporters do.

But it's also true that if (and when) they do then life for mainstream writers like Alterman could be _really_ difficult! He should keep his fingers crossed and hope that the bloggers remain "parasitic."